I assumed it was just a mistype I just wanted to make sure. Yea, it's probably just a faulty DVD like you suspect.
As far as which bootloader to install first, I have always let Windows have its way with the system first, them let Grub find Windows and add it to the Grub menu. Windows always seems to puke when Linux has the first partition on the hard drive, not to mention the fact that Windows installer will kill Grub or Lilo.
Absolutely, there's no reason to install linux first and then have to reinstall GRUB at the end and waste time when it could have been avoided.
You might just want to stick with XP since you only need it for a few applications. I prefer XP in some regards.